Imagine exiting Manchester's Piccadilly station soon after the blue electrics arrived from London Euston in 1966. Gateway House, the modern station office building designed by Colonel Richard Seifert, towered over you. A sweep of modern shops curved down to Piccadilly itself. In the 1963 film of Keith Waterhouse's comic novel Billy Liar, there is a scene in which Julie Christie crosses Piccadilly Plaza; all around her the new 1960s architecture is being constructed. It seems like an age ago.

Was the early 1960s a false dawn for Manchester? Liverpool had stolen a march in music, but its rival at the other end of the ship canal was much better connected to the rest of Britain and Europe. As Manchester tried to reinvent itself, it began to look the part of a modern, business-driven city. In 1960, Manchester Midland station was connected to London St Pancras by the svelte new Blue Pullman service, a fast, air-conditioned diesel train that seemed light years ahead of the four-hour steam services from Piccadilly to Euston.

Within the next few years came the electrification of the west coast main line with the new blue-and-grey InterCity trains belting down to London in just two and a half hours. To cash in on the Manchester business market, BEA put its new DeHavilland Trident jets on the route to Heathrow. The motorway closed in and there was a plan, since abandoned, to build an orbital super road.

An architecture rose up on concrete foundations to match the ambition of this dashing new InterCity world. All cool Swiss graphics and designer logos, it was as if those giants of modern architecture, Walter Gropius and Ludwig Mies van der Rohe, had ventured to Manchester.

Just look at the Manhattan-like CIS Tower (GS Hay and Sir John Burnet, Tait and Partners; interiors by Sir Misha Black and the Design Research Unit, 1962). In the right light it looks a bit like the sort of thing Mies was designing at the time for downtown Toronto: bronze-framed banks with travertine-lined lobbies potted with abstract sculptures. Or, it is a cluster of sleek towers, borrowing from SOM (Skidmore Owings and Merrill), who gave the US its corporate architectural look until postmodern design bludgeoned its way on to the skylines of New York and Chicago. Elsewhere in Manchester, there were bold new offices such as Aldine House (Leach, Rhodes and Walker, 1967) and, further out, the muscular Middleton council offices (Israel Lyons and Ellis, 1965).

If you look closely, and in the wrong light, the Mancunian office buildings of the InterCity era are not up to the impeccable standards of Mies. "There was a spirit of optimism and confidence in buildings of this period in Manchester," says Graham Russell, director of the city's Cube gallery. "But the light in Manchester is often drab so we commissioned G.ten, a group of photographers, to portray these buildings afresh as if they were bathed in the kind of west coast light that makes Julius Schulman's photographs of new Californian architecture of the 50s and 60s so seductive." But today's architecture is not so seductive. "When you look at what's happening in the city now, in architectural terms, it's disappointing. Manchester might be hip and successful in many ways, yet the new architecture, for the most part, is apologetic, second-rate, po-mo stuff, and it keeps going up."

Manchester International, the new exhibition at Cube curated by Tom Jefferies of the Manchester School of Architecture, is an intriguing attempt to re-evaluate the very architecture that, for whatever reason, Manchester appears to have turned its back on. The city plays up its spectacular Victorian heritage - and why not when the neo-Gothic City Hall by Alfred Waterhouse is one of Europe's greatest civic buildings?

Yet a modern masterpiece, such as the Piccadilly Plaza and Hotel (Covell Matthews, 1964), a concrete mega-structure that rivalled the best of avant-garde French and Japanese contemporary design, is under threat after years of physical neglect and visual abuse. The hotel was given a sprucing up in the early 1990s, but not in the spirit of the 1960s design it was conceived in.

"It's like a set from Thunderbirds," says Jefferies, "with its great concrete cantilevers and spiral entry ramp. Now it looks as if it's going to be clad in shiny silver panels; the whole point of its design will be lost." If this genuinely exciting 1960s building was in London, New York or almost anywhere on the continent, it would have been snapped up by a hotelier such as Ian Schrager, who would respect its design and could turn it into a hyper-fashionable overnight stay.

"The Piccadilly is still knocked," says Russell. "It's an awesome structure, but developers and the local business community are still told it's no good. Many of the 25 or so buildings we've put on show at Cube are now threatened with demolition or insensitive rebuilding."

Yet these buildings - or at least the spirit they were designed in - are popular among a younger generation of not just architects, but students, clubbers and Wallpaper* readers too. There is something about the crispness of this early 1960s vision that is attractive as we emerge from the slough of postmodern design.

If Manchester city council, local businesses and developers wanted to, they could trade on the city's 1960s heritage as much as they milk its Victorian lineage. What has put them off? Why do they seem out of step with the design tastes of a younger generation who would love to hang out in a swish new bar in a sensitively revamped Piccadilly Hotel?

Two words come to mind: Arndale Centre. This absurdly ugly 1970s retail termites' nest was meant to transform the heart of the city. It did, but much to its detriment. Far from being an update of an elegant Victorian shopping arcade, the Arndale Centre became a byword for bad modern architecture. It has been remodelled since the IRA bomb that devastated central Manchester five years ago, but it gave the city a bad name for years.

Manchester, especially now it has its successful tram network, upbeat Chinatown and buzzy nightlife, does have the air, on a good day, of a confident European city. Each weekend, some 140,000 visitors come to indulge in the city's boozy nightlife. Huge sums have been spent on rebuilding the centre, smartening up the Canal Street quarter, building a major new sports complex on the edge of the city, lining the canal with yuppie apartment blocks, stretching the investment down to Salford Quays, the bombast of the Lowry Centre and the explosion of ideas that give form to Daniel Libeskind's Imperial War Museum North.

What the city needs now is to rethink what a modern look could actually mean in architectural and design terms. A little less of the late flowering and now wilting postmodern would help; this and some energetic buildings with the confidence and optimism of the Manchester International period.

Cube itself is helping to lead the way with its new restaurant, designed by Daniel Libeskind and due to open next spring. David Chipperfield has rebuilt the Cornerhouse art gallery, Michael Hopkins is at work extending the city art gallery and Tadao Ando has designed a pavilion for Piccadilly gardens. Now, who can rescue the Piccadilly Hotel?